A New York bankruptcy judge on Wednesday approved interim agreements between Northwest Airlines Corp. and its pilots and flight attendants unions that included pay cuts of up to 24 percent.
A hearing to permanently terminate collective bargaining agreements the airline made with its pilot, flight attendant and machinist unions before it filed for bankruptcy in September has been postponed until January.
Eagan, Minn.-based Northwest, the nation's fourth-largest airline, expects a pretax loss of $1.7 billion for 2005 because of high fuel and wage costs, and said it is suffering losses of $4 million a day.
"The result will be significant cost savings," Judge Allan Gropper said, adding that the agreements should "ameliorate" Northwest Airlines financial problems.
The airline's attorney's said the agreement with the pilots union, the Air Line Pilots Association, included a 23.9 percent pay cut, while the accord with flight attendants reduced pay by 20.7 percent. The unions ratified the agreement on Monday.
The judge's order on Wednesday also effectively imposed pay cuts of 19 percent on a third union, the International Association of Machinists, which has not reached an interim agreement with airline.
The machinists union represents 14,420 Northwest baggage handlers, ticket agents, and other ground workers.
"The court allowed Northwest to impose significant pay reductions on our members, and it's going to create a great deal of hardship," said IAM spokesman Joseph Tiberi, "but we welcome the additional time it provides us to secure a long-term agreement with the company that we can bring back to our members for a vote."
Northwest also said Wednesday the Transport Workers Union has ratified a long-term labor cost restructuring agreement with the company. The TWU represents approximately 160 flight dispatchers and planners at Northwest, all who work in Minneapolis/St. Paul.
The carrier said a tentative agreement on long-term wage and benefit reductions with employees represented by the Northwest Airlines Meteorology Association had been reached and remains to be ratified.
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